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Goodyear is thinking of divesting one of the plants. The plant will generate free cash flows (FCF) of $3.8 million at the end of the

Goodyear is thinking of divesting one of the plants. The plant will generate free cash flows (FCF) of $3.8 million at the end of the first year and the cash flows will grow at 3%. The plant is financed with a debt of 50 million which is expected to remain constant. Goodyear has an equity cost of capital of 10% and a debt cost of capital of 6% and a marginal tax rate of 40%. Personal tax rates for marginal equity and debt investors are 10% and 15%. If the plant has an average risk similar to the whole firm, value the plant using the APV method. Assume a leverage ratio of 0.5. 91.245 96.875 94.125 101.255

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